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Saturday, June 30, 2012

It would be easy to look at this and conclude that digital will never
play a central role for consumer packaged goods, and that the industry's
data-driven executives must have caught on to the fact that digital
just doesn't work that well for them, despite much talk of late about
how efficient it is.

But the reality is far more complex. Several studies suggest digital
sells as well or better than TV for CPG brands. Despite the slow uptake
through nearly two decades of hype, packaged goods may now be on the
upward slope of a hyperbolic adoption curve, since digital as a
percentage of marketing spend has doubled or tripled at P&G,
Unilever and L'Oréal over the past few years.
Moreover, digital media appears on the brink of some measurement
breakthroughs that could have huge ramifications for data-driven CPG
marketers. That data revolution, however, is proceeding on separate
tracks with vastly different implications for how digital will be used.

Two years earlier, ComScore and Dunnhumby found a 9% average sales lift
for 600-plus CPG campaigns, compared with 8% for TV campaigns across 130
measured over several decades by SymphonyIRI. The digital lift came in
three months, vs.
12 months for the TV campaigns.

Digital may work faster in part because it's more targeted, said
ComScore Chairman Gian Fulgoni. But the other reason digital worked
faster in the study points to another key difference: In CPG, digital is
a conduit for price promotion.

How can retailers protect themselves from “showrooming,” where customers come into our store to find products they want to buy, but then walk out or stand right there and purchase them online from someone else?

Seeing customers turn on their smartphones—and then pass on buying your merchandise—hurts. “It’s like being at the high school dance and watching your date leave with someone better-looking than you,” says retail consultant Bob Phibbs.

You can try to stop the pain by posting signs encouraging people to shop local, or even fight technology with technology. “In the extreme, retailers will implement lasers in the store to break up handheld scanning apps from reading,” Wes Shepherd, the chief executive of online retail intelligence provider Channel IQ, writes in an e-mail.

New research from Deloitte suggests that more than 5 percent of store
sales during 2012 will be influenced by smartphones. For the purposes
of the survey, Deloitte defined “influence” to include activities such
as product research conducted by shoppers with their mobile device,
price comparisons and other mobile application usage. By 2016, that
influence will grow to 19 percent of sales, or $689 billion, the
Deloitte research suggests.

This phenomenon is rather disconcerting for the retail industry, and
some retailers have actually banned Wi-Fi in their stores in an effort
to prevent the activity and lock in customers. But a growing number,
such as The Home Depot,
are viewing mobile technology as a new way to inspire customer loyalty
and accelerate the purchasing process. Those retailers are embracing
’showrooming’ with technology of their own.

Innovations in information technology (IT) continue to transform the
retail sector, with digital signage, payment processing, customer
engagement and other solutions playing increasingly important functions,
according to new research released today by CompTIA, the non-profit association for the IT industry.

Seventy-two percent of retailers surveyed rate technology as important to their business, CompTIA’s Retail Sector Technology Adoption Trends Study reveals. That figure is projected to increase to 83 percent by 2014.

But
the study also indicates that large numbers of retailers have not yet
succeeded in using technology as well as they could or should. Just
seven percent of retailers report being exactly where they want to be in
using technology, while 29 percent rate themselves as being very close.

"Desktop and laptop usage is being replaced by tablet browsing," according to a new report by Monetate,
the e-commerce customization company. "At the current rate, website
traffic from PC users will dip below 75% in less than one year."

Until very recently, nearly 100 percent of shoppers arriving at retailers' web sites did so on a PC.

Walking into a convenience store today, consumers interact with a variety of technology applications, from pay-at-the-pump
and point-of-sale (POS) to kiosks and video monitors. At one point,
these technologies were considered cutting-edge, but these days they are
staples for many chains.

Now, there is a new crop of next-generation technology, including social media analysis, mobile payments and mobile applications (apps).
While retailers are still spending on technology considered critical to
operate their business, they are also investing in the latest and
greatest. More than half (51 percent) of respondents in the exclusive
2012 Convenience Store News Technology Study indicated they participate in social media, and 22 percent offer mobile apps to customers.

In 2010, only 26 percent of chains participated in social media,
and this number jumped to 41 percent by 2011. This year, 51 percent
report participation, and this figure is expected to continue to rise.
Social media, along with mobile apps and mobile payments, are certainly
top-of-mind for c-store chains and offer major opportunities for those
that jump on board.

Technology has shaped the way we live in nearly every facet of life.
One aspect that's poised to have the most impact, though, is the digital
wallet.

Consumers are transitioning from paying with credit cards and
cash to using whatever is easiest and most convenient for them,
potentially saving a few dollars or earning rewards in the process.
Companies like eBay(EBAY_), Square, and potentially Apple(AAPL_), are changing the way we pay for everyday goods and services.

Mobile payments are destined to be a key component of the
evolving "digital wallet," and investors need to be aware of this
emerging market. Battle lines in the war for market share are already
being drawn.

Just 49% of companies have a strategy for integrating mobile into broader marketing activity, including 35% who say integration is very basic.

Though mobile has grown rapidly over the past few years, it seems that many companies are held back by organisational issues, while others may need to focus on tactics such as optimizing email for mobile, rather than relying on QR codes.

Integrating mobile into marketing campaigns

There is massive potential here, but 51% of company respondents are not integrating mobile into marketing campaigns at all. Agency respondents paint a slightly brighter picture, with 56% reporting that clients have some basic integration in place.

Does your organisation have a strategy for integrating mobile into its broader marketing campaigns (company respondents)?

Types of mobile advertising

As the chart below shows, mobile search marketing figures highly here though, such is the potential, that 35% is very low. Just over a quarter (27%) are using push notifications, while 25% use mobile display advertising.

On the agency side, 42% say clients are using mobile search, compared to 41% for mobile display, and 37% for in-app ads.

What types of mobile advertising is your company engaged in?

Using mobile channels for brand interaction

Though 50% of companies surveyed said they encourage customers to interact with their brand using QR codes, and 35% have created apps, there is less take-up of more basic (and proven) methods.

For example, just 29% have a mobile commerce site, which makes you wonder what kind of landing pages all those QR codes are leading people to.

In addition, companies like British Airways have run successful campaigns and achieved impressive results by tailoring emails to users' mobile devices. Perhaps a focus on this and mobile commerce, rather than the QR code, would achieve greater ROI.

Which mobile channels do you use to encourage your customers to interact with your brand?

Email is a one-on-one conversation with your reader, which is part of what makes it so effective for marketing. Thousands of people may see your message (depending on the size of your list), but the conversation ultimately happens in one person’s inbox at a time.

Because email feels so personal, your messages need to connect with the people you’re talking to. You need to keep each individual engaged with your message so that your email can sell.

Here are four ways to draw a person into conversation in the inbox.

1. Draw Them In With Killer Headlines

The subject line is your conversation starter. It’s your first impression in the inbox and helps your reader make up his mind whether your email is worth reading or not.

There are plenty of ways to craft a killer subject line that draws your reader in. Ask a question, or tease your message content with a clever play on words. Just make sure that it’s related to your message content — you don’t want your readers to regret opening the message, because they won’t forget it.

2. Tell A Story

People relate to stories better than they relate to a straight-up sales pitch. Stories are entertaining and they give you and your business a relatable personality.

One of the most effective stories you can tell is about your problems — the problems that prompted you to start your business or launch your product. Your reader can likely relate to these frustrations himself, and that establishes the clear need for your services or the niche you designed your product to fill.

A well-crafted story that relates to your reader’s common pains and problems can be more effective than any sales pitch.

3. Get Personal

Getting personal goes hand-in-hand with storytelling. People prefer buying from other people, rather than from impersonal brands.

So go ahead and talk about yourself to build rapport with your audience. Use an automated follow up series to introduce yourself and the people who work with you. That allows your reader to feel like he knows the people behind the brand name.

Email is a one-on-one conversation, and making it more personal makes it feel more natural.

4. Give A Clear Call To Action

After opening and reading your message, your reader needs to do something with it. What do you want them to do? That’s your call to action.

An effective call to action should be clear but not demand too much from your reader. Asking someone to “Buy now!” might be too abrasive and turn him off from making a purchase.

Instead, build from the relationship established in your email. Make the next step simple: a call to “Find out more” or “Read the benefits” is usually more appealing than a demand to buy when they may not be ready yet. Calls to interact with you on social networks or give feedback on your service can get a good response, too.

Focusing on store-level data for large retailers enables consumer goods (CG) companies to maintain a competitive foothold on the foundational capabilities needed to win in modern retail. One such CG giant that is leveraging downstream data to build more effective retailer partnerships is the Procter & Gamble Company (P&G).

-- As a member of P&G’s Retailer Connect Program, part of the Global Business Services Business Unit pillar, Michelle Tower discussed how on-shelf availability is a well-known industry issue for both retailers and manufacturers. “Ensuring we have the right product on the shelf at the right times is becoming a greater challenge to manage in a world of more events and complex supply chains,” she said. Tower shared how P&G is working with its retail partners to help improve one of those capabilities — the shelf replenishment process — by using POS data to identify out of stock/zero sales incidents and then act in store to fix those opportunities and drive sales. Tower closed by exploring a couple of case studies in which P&G has leveraged downstream data to drive better execution in store and grow its business.